Business News

Apr 04, 2019

8:22PM

RBI tweaks LCR norms to boost liquidity

In a bid to further improve the cash position of banks, RBI has tweaked liquidity coverage ratio (LCR) norms to provide an additional 2 per cent window to lenders.

Speaking to reporters in Mumbai, RBI Governor Shaktikanta Das said, this move will harmonise the liquidity requirements of banks and release additional money for lending.

LCR indicates the proportion of highly liquid assets held by banks to ensure their ability to meet short-term obligations.

In a statement on ‘Developmental and Regulatory Policies’ the RBI has extended the timeline for linking floating interest rates on personal, home, auto and MSEs loans to external benchmarks.

It said that further discussions with stakeholders is required on various aspects like management of interest rate risk and time required for IT system upgradation.

In another decision, the Apex Bank said it, will set up a task force to study the relevant aspects, including best international practices for developing a thriving secondary market for corporate loans in India.